Troy Aikman Foundation sitting on $1.6 million in unused funds

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Cowboys quarterback Tony Romo and former Cowboys quarterback Troy Aikman appear to talk about the injuries before the game as the Dallas Cowboys play the Indianapolis Colts at Lucas Oil Stadium in Indianapolis, Sunday, December 5, 2010.

Unless they're accumulating money for a big expense – like building a community center – public charities should keep no more than three times their annual expenses in reserve, according to the nonprofit watchdog group.

On its IRS filing for 2008, the Troy Aikman Foundation reported having a savings account of more than $1.6 million, more than 16 times its expenses.

Daniel Borochoff, president of the institute, which examines the finances of many of the nation's largest charities and rates them, said Aikman's foundation shouldn't be sitting on the money.

“With the economy we have right now and the need for help, you have to think about the opportunities lost,” he said.

Aikman, the former Dallas Cowboy and Hall of Fame quarterback, defended his foundation's financial philosophy.

He said the reserve is a safety net for his philanthropy projects – building interactive playrooms in children's hospitals with a charity run by singer Garth Brooks.

The Aikman Foundation met year-over-year industry efficiency guidelines because it donated almost all of the money it raised in 2008 to charity, about $70,000.

How it works

Aikman partners with Teammates for Kids, a charity run by Brooks, to build the interactive hospital playrooms. Teammates for Kids used 78.3 percent of its spending for its programs in 2008.

Aikman said the relationship works like this:

The Aikman Foundation executes the contract for a playroom and works in partnership with HKS Architects in Dallas on the design. Brooks' nonprofit, and donations from the business community, pay to build it.

The result is a low investment, or none, from the Aikman Foundation.

“We don't just hand out money for all these various causes. Our mission statement is very clear about what we're doing,” Aikman said.

“Now, is that a substantial amount of money in reserve? Yeah, but only because we haven't been called upon yet to put that money into the work we're doing.”

Aikman said he keeps the reserve in case Brooks' foundation or others won't underwrite the projects. So far, that hasn't happened.

Seven interactive playrooms, including one in Children's Medical Center Dallas and another in Cook Children's Medical Center in Fort Worth, have been built around the country since 1992.

The Aikman Foundation has low overhead costs and pays no salaries.

“The reason I feel good about somebody who wants to contribute to my foundation is that I know what that money's going toward, whether it's today or it's next year,” Aikman said.

“It's not being used to throw some party, and it's not being used to fund an office building.”

A financial analyst who reviewed the Aikman Foundation's records said a charity shouldn't keep a rainy day fund unless it is accruing money for a specific project.

“To have a charity sitting on many, many times its budget in reserve for an event in the future that may or may not occur. ... If all charities did that, we'd be in big trouble,” said Laurie Styron, an analyst with the American Institute of Philanthropy.

Aikman's philosophy, Styron said, is similar to a world hunger organization sitting on its money because it doesn't know where the next famine will break out – even though people are starving around the world today.

“I'm sure Troy Aikman has other causes he really feels passionate about, and he should really consider donating this money to one of those if he's not able to use it in the near future,” she said.

Persona equals leverage

Michael Reilly, a real-estate investor in Aledo who runs Aikman's foundation, said the strategy makes solid business sense.

“If I can use Aikman's persona and Garth Brooks' persona, and we can use a lot of other people's money to create $2 million to $3 million facilities, that's what we're all about,” he said. “You can second-guess and criticize all you want, but look what we do with the leverage, without spending the money.

“I'm not going to apologize,” Reilly said. “If you give me a million dollars and I can keep it in the bank and get $10 million in benefit – well, in my business you get a pat on the ass.”